March 10, 2003
As reflected in an interview
As reflected in an interview with Pat McGurn, as one of its new policies, ISS will recommend voting against ratification of a company’s auditors – as well as withholding for a company’s audit committee members – if the company does not meet a simple formula regarding the level of the audit and audit-related fees paid to the auditor compared to non-audit fees (ISS separately analyzes the types of fees in the “tax fees” column to determine which side of the equation each fee should go).
The bottom line is that companies should voluntarily comply with the SEC’s new audit fee table (which is adopted but not yet effective) to enable ISS to conduct its analysis. Otherwise, the company faces the prospect of numerous votes against ratification of auditors and withholding for audit committee members – ISS already has recommended this adversarial stance in the first instances it has arisen since ISS’ new policies took effect early last week. TheCorporateCounsel.net subscribers can learn more about all of ISS’ new policies in the Pat McGurn interview posted at http://www.thecorporatecounsel.net/member/InsideTrack/03_10_03_McGurn.htm.
Warren Buffett’s annual letter to shareholders always is interesting reading – this year’s letter criticizes derivatives (page 13), corporate governance, executive compensation and the accounting profession (page 16). You can read it at http://www.berkshirehathaway.com/letters/2002pdf.pdf.